Sure, there are many other ways to quantify success, such as financial returns and profits. However, with competition high in the retail landscape, customer engagement metrics are important to retailers that don’t want to play in the little leagues.
Customer engagement definitions
Customer service, customer experience and customer engagement are separate but interdependent concepts.
- Customer engagement: At its most basic, customer engagement is the interaction a company has with its customers over multiple channels in order to strengthen the relationship.
- Customer experience: It is how customers perceive their interactions with your company. For customer experience to be great, every interaction along the customer journey must be exceptional.
- Customer service: Is the support you offer your customers before and after the buy your products.
In other words, the goal of customer engagement is to deliver value beyond the potential transaction of products or services, and it’s mostly done through excellent customer service, valuable content, top level customer experiences, etc.
Customer engagement metrics examples
- Net Promoter Score (NPS) surveys
- Customer satisfaction surveys (CSAT)
- Customer Churn Rate
- Customer Lifetime Value (CLV)
- Repeat Purchase Rate
- Customer Retention Rate
- Average Order Value (AOV)
Tools and techniques to measure customer engagement
Measuring customer engagement is essential for enterprise retailers to understand the effectiveness of their strategies and initiatives. By utilizing the right tools and techniques, retailers can gain valuable insights into customer behavior, preferences, and satisfaction levels. Here are some key tools and techniques commonly used for measuring customer engagement:
Customer Data Platforms (CDP)
CDPs play a crucial role in tracking and managing customer interactions, providing a complete view of all online and in-store customer engagements.
These tools enable retailers to capture and analyze customer data, including purchase history, preferences, and communication records.
By integrating various data sources, such as point-of-sale systems, websites, and customer service interactions, CDPs provide a comprehensive understanding of customer engagement across different touchpoints.
Benefits of CDPs for tracking customer engagement metrics:
- Single Customer View: CDPs consolidate customer data from multiple sources, allowing retailers to access a unified view of customer data and metrics.
- Segmentation and targeting: With a CDP, retailers can segment their customers based on demographics, preferences, and behavior, enabling personalization at scale.
- Retail analytics: CDPs facilitate tracking KPIs and providing data-driven insights, helping retailers optimize engagement at each stage.
What to look for in a customer engagement platform
- Cross-channel tracking & attribution: A customer engagement platform collects first-party data from various channels. It attributes results to interactions on those channels (e.g user X arrived at the landing page through an Instagram ad).
- Ability to collect and clease all retail data: Look for the capability to recognize a customer across multiple channels and unite all their data (on how they interact with your business) into a unified profile, or a single customer view. You can then build customer segments based on these profiles in order to design relevant and personalized campaigns.
- Integrations: APIs for communication, customer support, marketing, product improvement, and sales tools let you build a customer engagement system. You can then add apps specific to your vertical, like a personal stylist chatbot for fashion retailers.
Customer surveys and feedback
Customer surveys and feedback collection are valuable techniques for measuring customer engagement. They lets retailers gather insights, opinions, and preferences directly from their customers, providing a qualitative understanding of engagement levels.
Surveys can be conducted through email, online forms, and mobile apps, and enable customers to provide open-ended feedback, suggestions, or complaints, etc.
Tips for effective feedback collection
- Send pout timely and targeted surveys: Sending surveys at strategic touchpoints in the customer journey, such as after a purchase or customer service interaction, can yield more relevant and accurate feedback.
- Create short and user-friendly surveys: Keeping surveys concise and easy to navigate improves the likelihood of customers completing them, leading to higher response rates.
- Offer incentives and rewards: Offering incentives, such as discounts or loyalty points, can motivate customers to provide feedback, increasing survey participation rates.
Social media analytics in retail
Social media platforms have become a vital channel for customer engagement, making social media analytics tools indispensable for measuring and monitoring customer sentiment, feedback, and interactions. These tools enable retailers to track brand mentions, monitor customer conversations, and measure the impact of social media campaigns on customer engagement.
Tips for effective social media analytics
- Social listening: monitor brand mentions, hashtags, and customer conversations
- Track metrics such as likes, comments, shares, and followers
- Analyze how customers engage with competitors’ brands
- Identify and assess the impact of influencers on customer engagement by tracking metrics like engagement rates and follower growth
- Analyze customer sentiments expressed in social media posts and comments
- Proactively address customer concerns, identify recurring issues, and take corrective actions to improve engagement.
Why to focus on customer engagement metrics
If you need some hard numbers in order to be fully persuaded, check these out:
- A high-quality customer experience can lower the overall expense of serving customers by 33%
- After a single positive experience with a brand, customers spend up to 140 % more with it
- 96% of customers report that customer service significantly influences their loyalty to a brand
- After getting a more personalized experience, 49% of purchasers state that they have made impulse purchases (unplanned buying)
- A study had even predicted that customer experience would get ahead of the two primary brand-differentiating factors- product and price, by the end of 2020. It drives more than two-thirds of customer loyalty
- Three main parameters influencing customer engagement are convenience (55%), quality (80%), and price (81%)
- 67% of consumers prefer self-serve over conversing with a customer representative.
- More than 75% of marketers say that maximum engagement occurs in the middle or end-stage of the marketing funnel
- Omnichannel customer engagement is preferred by almost 78% of customers
Obviously no customer wants to do business with a company that treats him or her poorly. But doing well is not good enough. Customer experience has become a top priority for many retailers in order to differentiate themselves, tackle aggressive competitors and discounters and lower the risk of losing share of wallet.
But there’s a problem—many retailers don’t know how to do it right.
In fact, you’ve probably interacted with those retailers.
Those retailers have a product- and sales-centric philosophy. Let’s take a look at this concept.
Understanding profitable customer engagement
The customer engagement philosophy advocates developing a loyal customer base and nurturing relationships with them.
Apart from purchases, there are 3 other ways customers can contribute indirectly
- by referring others, which in turn reduces acquisition costs and brings in future revenue.
- by interacting with other customers online, which will in turn affect other’s behavior through increased conversion of others to customers, increased retention or changes in their share of wallet.
- by actively seeking their feedback on their products. Customer input can be a valuable resource in product development, quality improvement efforts and helping the company understand customer preferences.
The challenge in customer engagement metrics
Customer engagement principles have been studied for a long time, but many retailers have yet to quantify their efforts and results.
The challenge has always lied in quantifying customer experiences and deriving value out of it through customer management strategies.
That makes objective measurement and evaluation of customer engagement metrics quite challenging.
In other words, using credible metrics in customer engagement efforts will go a long way for retailers to identify sources of profit contribution and nurture, grow and maximize customer engagement.
How to ensure your customer engagement plan works
In its basic form, an effective customer engagement strategy requires 3 essential elements:
- Clearly defined customer engagement goals
- A set of strategies that positively influence the customer engagement metrics
- The technology that enables the execution of customer engagement
To measure customer engagement, your technology must be aligned with your business goals.Borja Sanfeliu, CEO of Loyal Guru
Here are the top features your should look for as you evaluate your options
- Make sure you prioritize customer engagement solutions built specifically for the retail industry
- Ensure their customer data platform truly collects and unifies data from all online and offline sources, to have accurate customer profiles
- Ask about their data activation capabilities
- Examine what omnichannel features and capabilities it offers
- Make sure they work with leading retailers
- Ask how strong their development team is, and how frequently they add new features
- Make sure they give you full control and ownership over your customer data
- Make sure they are GDPR a CCPA compliant
Many companies spend millions of dollars in an effort to attract customers. But to attract customers and not keep them falls nowhere short of a crime. Profitable customer engagement, which leads to long-term retention and increased LTV, starts with carefully selecting the right customers – those that are profitable.
It is followed by an understanding of what engages the customer so they are happy with your products and are likely to become repeat customers of your retail business. But, there is a greater value of customers beyond their purchases – how they influence others to engage with your products as well.
With the emergence of technology we now have the opportunity to start tracking which of our customers are offering what value. And in turn, what, how and when we communicate with them to increase profitability today.
If you’re a retailer and you’d like to talk about any of the customer engagement strategies outlined in this article in more detail, please set up a chat with our team – we’ll be happy to show you examples or talk through your brand’s unique challenges.